GEO GROUP INC/THE (GEO) Stock Fundamental Analysis
NYSE:GEO - New York Stock Exchange, Inc. - US36162J1060 - Common Stock - Currency: USD
We assign a fundamental rating of 5 out of 10 to GEO. GEO was compared to 84 industry peers in the Commercial Services & Supplies industry. While GEO is still in line with the averages on profitability rating, there are concerns on its financial health. GEO has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
In the past year GEO was profitable.
GEO had a positive operating cash flow in the past year.
Each year in the past 5 years GEO has been profitable.
GEO had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
GEO has a Return On Assets (1.51%) which is in line with its industry peers.
GEO has a Return On Equity of 4.17%. This is comparable to the rest of the industry: GEO outperforms 53.66% of its industry peers.
GEO has a better Return On Invested Capital (9.33%) than 74.39% of its industry peers.
GEO had an Average Return On Invested Capital over the past 3 years of 7.17%. This is below the industry average of 10.12%.
The last Return On Invested Capital (9.33%) for GEO is above the 3 year average (7.17%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.51% | ||
| ROE | 4.17% | ||
| ROIC | 9.33% |
ROA(3y)2.58%
ROA(5y)2.83%
ROE(3y)8.78%
ROE(5y)11.08%
ROIC(3y)7.17%
ROIC(5y)6.31%
1.3 Margins
GEO has a Profit Margin of 1.81%. This is comparable to the rest of the industry: GEO outperforms 53.66% of its industry peers.
In the last couple of years the Profit Margin of GEO has declined.
The Operating Margin of GEO (13.38%) is better than 82.93% of its industry peers.
GEO's Operating Margin has improved in the last couple of years.
GEO's Gross Margin of 27.04% is in line compared to the rest of the industry. GEO outperforms 41.46% of its industry peers.
GEO's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 13.38% | ||
| PM (TTM) | 1.81% | ||
| GM | 27.04% |
OM growth 3Y12.09%
OM growth 5Y5.16%
PM growth 3Y-8.43%
PM growth 5Y-9.92%
GM growth 3Y4.44%
GM growth 5Y2.34%
2. Health
2.1 Basic Checks
GEO has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
The number of shares outstanding for GEO has been increased compared to 1 year ago.
The number of shares outstanding for GEO has been increased compared to 5 years ago.
The debt/assets ratio for GEO has been reduced compared to a year ago.
2.2 Solvency
GEO has an Altman-Z score of 2.19. This is not the best score and indicates that GEO is in the grey zone with still only limited risk for bankruptcy at the moment.
GEO has a Altman-Z score (2.19) which is in line with its industry peers.
GEO has a debt to FCF ratio of 8.52. This is a slightly negative value and a sign of low solvency as GEO would need 8.52 years to pay back of all of its debts.
With a Debt to FCF ratio value of 8.52, GEO perfoms like the industry average, outperforming 56.10% of the companies in the same industry.
A Debt/Equity ratio of 1.25 is on the high side and indicates that GEO has dependencies on debt financing.
With a Debt to Equity ratio value of 1.25, GEO is not doing good in the industry: 70.73% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.25 | ||
| Debt/FCF | 8.52 | ||
| Altman-Z | 2.19 |
ROIC/WACC1.06
WACC8.78%
2.3 Liquidity
GEO has a Current Ratio of 1.10. This is a normal value and indicates that GEO is financially healthy and should not expect problems in meeting its short term obligations.
With a Current ratio value of 1.10, GEO is not doing good in the industry: 70.73% of the companies in the same industry are doing better.
GEO has a Quick Ratio of 1.10. This is a normal value and indicates that GEO is financially healthy and should not expect problems in meeting its short term obligations.
GEO has a worse Quick ratio (1.10) than 62.20% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.1 | ||
| Quick Ratio | 1.1 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 5.81% over the past year.
GEO shows a decrease in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -6.69% yearly.
The Revenue has grown by 24.91% in the past year. This is a very strong growth!
The Revenue has been growing slightly by 0.69% on average over the past years.
EPS 1Y (TTM)5.81%
EPS 3Y-8.49%
EPS 5Y-6.69%
EPS Q2Q%10.53%
Revenue 1Y (TTM)24.91%
Revenue growth 3Y0.89%
Revenue growth 5Y0.69%
Sales Q2Q%0.06%
3.2 Future
The Earnings Per Share is expected to grow by 54.31% on average over the next years. This is a very strong growth
Based on estimates for the next years, GEO will show a quite strong growth in Revenue. The Revenue will grow by 10.72% on average per year.
EPS Next Y-1.64%
EPS Next 2Y35.52%
EPS Next 3Y54.31%
EPS Next 5YN/A
Revenue Next Year0.91%
Revenue Next 2Y7.24%
Revenue Next 3Y10.72%
Revenue Next 5YN/A
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
GEO is valuated quite expensively with a Price/Earnings ratio of 27.85.
The rest of the industry has a similar Price/Earnings ratio as GEO.
When comparing the Price/Earnings ratio of GEO to the average of the S&P500 Index (29.63), we can say GEO is valued inline with the index average.
Based on the Price/Forward Earnings ratio of 15.86, the valuation of GEO can be described as correct.
GEO's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. GEO is cheaper than 73.17% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 22.68. GEO is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 27.85 | ||
| Fwd PE | 15.86 |
4.2 Price Multiples
GEO's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. GEO is cheaper than 68.29% of the companies in the same industry.
70.73% of the companies in the same industry are more expensive than GEO, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 17.83 | ||
| EV/EBITDA | 10.1 |
4.3 Compensation for Growth
The decent profitability rating of GEO may justify a higher PE ratio.
A more expensive valuation may be justified as GEO's earnings are expected to grow with 54.31% in the coming years.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y35.52%
EPS Next 3Y54.31%
5. Dividend
5.1 Amount
No dividends for GEO!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
25.34
-1.4 (-5.24%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryCommercial Services & Supplies
Earnings (Last)
Earnings (Next)
Inst Owners88.5%
Inst Owner Change14.53%
Ins Owners1.55%
Ins Owner Change-0.09%
Market Cap3.54B
Analysts80
Price Target37.74 (48.93%)
Short Float %6.01%
Short Ratio2.83
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly Dividend0
Dividend Growth(5Y)N/A
DP0%
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)11.9%
Min EPS beat(2)-15.06%
Max EPS beat(2)38.86%
EPS beat(4)2
Avg EPS beat(4)19.94%
Min EPS beat(4)-15.06%
Max EPS beat(4)63.37%
EPS beat(8)3
Avg EPS beat(8)8.6%
EPS beat(12)6
Avg EPS beat(12)13.77%
EPS beat(16)9
Avg EPS beat(16)15.31%
Revenue beat(2)0
Avg Revenue beat(2)-1.84%
Min Revenue beat(2)-2.63%
Max Revenue beat(2)-1.06%
Revenue beat(4)1
Avg Revenue beat(4)-0.89%
Min Revenue beat(4)-2.63%
Max Revenue beat(4)0.8%
Revenue beat(8)3
Avg Revenue beat(8)-0.29%
Revenue beat(12)5
Avg Revenue beat(12)0%
Revenue beat(16)6
Avg Revenue beat(16)-0.15%
PT rev (1m)26.71%
PT rev (3m)106.13%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-18.08%
EPS NY rev (1m)0%
EPS NY rev (3m)-8.18%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-1.8%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.85%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 27.85 | ||
| Fwd PE | 15.86 | ||
| P/S | 1.17 | ||
| P/FCF | 17.83 | ||
| P/OCF | 12.84 | ||
| P/B | 2.69 | ||
| P/tB | 8.22 | ||
| EV/EBITDA | 10.1 |
EPS(TTM)0.91
EY3.59%
EPS(NY)1.6
Fwd EY6.31%
FCF(TTM)1.42
FCFY5.61%
OCF(TTM)1.97
OCFY7.79%
SpS21.67
BVpS9.41
TBVpS3.08
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.51% | ||
| ROE | 4.17% | ||
| ROCE | 12.7% | ||
| ROIC | 9.33% | ||
| ROICexc | 9.55% | ||
| ROICexgc | 13.32% | ||
| OM | 13.38% | ||
| PM (TTM) | 1.81% | ||
| GM | 27.04% | ||
| FCFM | 6.56% |
ROA(3y)2.58%
ROA(5y)2.83%
ROE(3y)8.78%
ROE(5y)11.08%
ROIC(3y)7.17%
ROIC(5y)6.31%
ROICexc(3y)7.57%
ROICexc(5y)6.63%
ROICexgc(3y)10.42%
ROICexgc(5y)9.04%
ROCE(3y)9.76%
ROCE(5y)8.59%
ROICexcg growth 3Y21.53%
ROICexcg growth 5Y8.03%
ROICexc growth 3Y19.82%
ROICexc growth 5Y8.18%
OM growth 3Y12.09%
OM growth 5Y5.16%
PM growth 3Y-8.43%
PM growth 5Y-9.92%
GM growth 3Y4.44%
GM growth 5Y2.34%
F-Score5
Asset Turnover0.83
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.25 | ||
| Debt/FCF | 8.52 | ||
| Debt/EBITDA | 3.09 | ||
| Cap/Depr | 61.64% | ||
| Cap/Sales | 2.55% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 52% | ||
| Profit Quality | 361.76% | ||
| Current Ratio | 1.1 | ||
| Quick Ratio | 1.1 | ||
| Altman-Z | 2.19 |
F-Score5
WACC8.78%
ROIC/WACC1.06
Cap/Depr(3y)59.03%
Cap/Depr(5y)69.49%
Cap/Sales(3y)3.3%
Cap/Sales(5y)3.85%
Profit Quality(3y)228.51%
Profit Quality(5y)222.55%
High Growth Momentum
Growth
EPS 1Y (TTM)5.81%
EPS 3Y-8.49%
EPS 5Y-6.69%
EPS Q2Q%10.53%
EPS Next Y-1.64%
EPS Next 2Y35.52%
EPS Next 3Y54.31%
EPS Next 5YN/A
Revenue 1Y (TTM)24.91%
Revenue growth 3Y0.89%
Revenue growth 5Y0.69%
Sales Q2Q%0.06%
Revenue Next Year0.91%
Revenue Next 2Y7.24%
Revenue Next 3Y10.72%
Revenue Next 5YN/A
EBIT growth 1Y7.53%
EBIT growth 3Y13.08%
EBIT growth 5Y5.89%
EBIT Next Year35.7%
EBIT Next 3Y28.41%
EBIT Next 5YN/A
FCF growth 1Y45.56%
FCF growth 3Y-13.97%
FCF growth 5Y21.88%
OCF growth 1Y25.06%
OCF growth 3Y-13.6%
OCF growth 5Y0.75%